Workers Compensation for Florida Contractors: What You're Required to Carry

Workers compensation insurance is one of the most misunderstood—and most expensive—coverages Florida contractors deal with. Get it wrong, and you're looking at fines, penalties, or worse. Here's what you need to know.

Florida's Workers Comp Requirements for Contractors

Florida law is strict when it comes to workers compensation coverage, per FL Statute 440.10. Here's the bottom line:

Construction Industry (including contractors):

• One or more employees? You must carry workers comp.
• Sole proprietor or partner? You can exempt yourself, but you need to file the exemption with the state.
• Corporate officers? You can exempt yourself if you own at least 10% of the company under FL Statute 440.05, but you must file for the exemption.

Non-construction businesses:

• Four or more employees? Workers comp is required.
• Fewer than four? You're not required to carry it, but many clients will demand it anyway.

The key distinction: construction includes contractors, electricians, plumbers, HVAC techs, roofers, painters, and anyone working on building or repair projects. If you're in the trades, the one-employee rule applies to you.

What Happens If You Don't Carry Workers Comp

Bottom line: if you have employees in Florida construction, carry workers comp. The risk isn't worth it.

Understanding Classification Codes and Payroll

Workers comp rates are based on classification codes (class codes) that describe the type of work your employees do. Each code has a different rate per $100 of payroll.

Common contractor class codes and approximate rates:

• Carpentry (5645): $8-12 per $100 of payroll
• Electrical wiring (5190): $4-7 per $100
• Plumbing (5183): $5-9 per $100
• HVAC installation (5551): $6-10 per $100
• Roofing (5551): $15-25+ per $100 (highest risk)

The Payroll Audit: What to Expect

When your policy renews, your insurance carrier will conduct a payroll audit. They'll compare your estimated payroll (what you paid the premium on) to your actual payroll for the year.

What they'll request:

• Payroll records and tax filings (941s, W-2s, 1099s)
• Proof of insurance for subcontractors
• Job descriptions for each employee

Common audit surprises:

• Higher actual payroll than estimated: You'll owe the difference
• Uninsured subcontractors: If your subs don't have their own workers comp, your carrier will treat their payments as your payroll—and charge you accordingly
• Misclassified employees: If you classified everyone as "clerical" but they were actually doing installations, expect a big bill

Exemptions: Should You Take One?

Florida allows certain individuals to exempt themselves from workers comp:

Sole proprietors and partners: Can exempt themselves but must file Form DBPR-CU-100 with the Department of Business and Professional Regulation.

Corporate officers: Can exempt if they own at least 10% of the company. Must file the same exemption form.

Why you might NOT want to exempt yourself:

• Many general contractors and commercial clients require everyone on the job site to be covered
• If you're injured, you have no coverage for medical bills or lost wages
• Some lenders require coverage as a condition of financing

Why you might exempt yourself:

• Saves money (no premium on your own payroll)
• You carry personal disability insurance instead
• You rarely work on-site (mostly office/sales work)

It's a personal decision. We recommend talking to your accountant and insurance agent before filing an exemption.

How to Lower Your Workers Comp Costs

1. Classify employees accurately: Don't lump everyone into the highest-risk category. Office staff should be coded as clerical.

2. Implement a safety program: Carriers reward safety training, toolbox talks, and equipment inspections. Some offer 10-20% discounts.

3. Use a pay-as-you-go plan: Instead of paying a big upfront premium based on estimated payroll, some carriers let you pay monthly based on actual payroll. No surprises at audit time.

4. Require subcontractors to carry their own coverage: Always collect certificates. If they don't have coverage, their payments become your liability.

5. Control your claims: One serious injury can spike your rates for years. Invest in safety equipment, training, and a strong return-to-work program.

What to Do If You Get a Stop-Work Order

If the Florida Division of Workers' Compensation issues a stop-work order, here's what to do immediately:

1. Stop all work at the site
2. Obtain workers comp coverage (call us—we can get you covered in hours)
3. Pay the penalty (usually $1,000 minimum)
4. Request an order release from the state once you have proof of coverage

Time is money. Every day your crew sits idle costs you revenue. Don't wait until you're caught without coverage.

Get Covered Today

Workers comp doesn't have to be confusing. At Greene & Associates, we help Florida contractors understand their requirements, find competitive rates, and stay compliant.

We work with over 24 carriers and specialize in contractor insurance. Whether you're an HVAC contractor, electrician, plumber, or site prep contractor, we'll find the right coverage at the right price.